Developer waits for third ruling in money laundering

Kim Smith

Monday, Sept. 25, 2000 | 11:27 a.m.

Golf course developer Billy Walters could find out this week if the money laundering charges against him will be dismissed for a third time.

District Judge Mark Gibbons heard more than two hours of arguments from defense attorneys and the Attorney General's Office Friday in the Walters case. He is expected to rule this week.

Authorities believe Billy Walters, James Hanley and Daniel Pray operated an illegal gambling ring out of Walters' sports consulting business Sierra Sports Consultants.

Authorities raided the business in December 1996. Since then three indictments have been brought against the three men and New Yorker John Tognino.

Two of those indictments have been dismissed because of problems during the grand jury proceedings.

Each of the three men's attorneys, Richard Wright, John Moran Jr. and JoNell Thomas argued again on Friday that there were fatal flaws in the attorney general's presentation of the case.

Deputy Attorney General David Thompson, however, argued "voluminous" evidence against the men would still exist even if the judge were to decide portions of the proceedings were inappropriate.

Wright told Gibbons that it is clear from reading the transcripts that the grand jurors were confused by the law and inflamed by irrelevant talk of organized crime.

In order to indict someone on a criminal charge, prosecutors must prove by "slim or marginal" evidence that a defendant committed each of the elements contained within a charge.

However, in the Walters case, the defense attorneys argues, it was obvious that the grand jurors didn't understand all of the elements.

"The prosecutors never once in five sessions correctly stated the elements of the offense," Wright said.

One of those elements is that the men had to know they were committing a crime, Wright said. Walters was acquitted by a federal jury in 1991 on the same charges and therefore obviously thought he was doing nothing wrong.

"They were placing bets. Nothing more and nothing less," Wright said.

The indictment should also be thrown out because Walters and his co-defendants were tainted by talk of organized crime, their attorneys said.

New York detective Edward Galanek, an expert on gambling, spoke at length about organized crime, organized crime families and bookmaking.

"The grand jurors couldn't have heard all of this and not think this was some type of organized crime thing," Wright said.

Thompson said the jurors were told numerous times not to infer anything from Galanek's testimony.

In arguing for the indictment to stand, Thompson focused on what evidence he says exists.

Thompson said that between August 1991 and November 1996 Hanley paid out millions of dollars in cash to people who were identified only through code names. The money came from Walters, but the safety deposit boxes were in Hanley's name so Walters could not be tied to it, Thompson said.

There were 128 transactions during that time, Thompson said. Five of the transactions were worth $1 million or more and 31 were for $100,000 or more.

"You don't have to make a big leap of the imagination to know that something was wrong," Thompson said.

In addition, the phone number of Sierra Sports was changed numerous times, which is not unusual in illegal operations, Thompson said. In one month 9,000 calls were made from 47 different phone numbers.